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Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations insured commercial plans and not administrative services only ASO
commercial plans.
Response: For reasons noted above including concerns there is not enough information or specificity regarding the commercial insurer criteria, we have committed to issuing standards on what types of commercial insurers should CMS consider for making NCDs and LCDs.
Evidence That Supports Clinically Relevant Differences Comment: Commenters suggested that CMS provide greater specificity regarding its standard for determining when there are clinically relevant differences between Medicare beneficiaries and commercially insured individuals. Commenters recommended a variety of factors to consider. A commenter also stated there likely are not clinical differences in the need for DME and medical supplies between the privately insured and Medicare beneficiaries.
Response: We have removed this criteria from the final definition.

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Grandfathering Comment: A few comments stated that CMS should grandfather established NCDs and LCDs that have already been subject to notice, stakeholder comment, and evidence review from any coverage restrictions stemming from incorporation of commercial coverage policies. Another comment stated that CMS should grandfather existing NCDs/LCDs and policies generated through negotiated rulemaking.
Response: CMS does not intend to revise its LCDs and NCDs. We believe initially that definition is the familiar and will not require CMS to revise its coverage decisions. As we write the standards for establishing the methodology by which commercial insurers policies are determined to be relevant based on the measurement of majority of covered lives, we will consider how these standards may effect coverage at that time.
Appeals Process Comment: Several commenters requested that a new appeals process be developed that allows a beneficiary or provider to use a commercial policy as part of their evidence that an item or service is reasonable and necessary, and then require the MAC to afford this policy significant weight as part of its review on reconsideration. Another commenter requested clarification on how the newly codified reasonable and necessary definition will be used for
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appeals. Another commenter stated that CMS would need a transparent and accelerated process to appeal coverage policies and articles.
Response: We thank commenters for their input. We added in the final rule that commercial insurer coverage may be used as part of the evidence during an appeal. Nothing in this rule changes the process to appeal a claim.
Final Action: We are finalizing our proposal with modification to define the term reasonable and necessary based on the factors currently found in the PIM. Further, for national and local coverage determinations, which have insufficient evidence to meet the longstanding appropriateness criteria, CMS
will consider coverage to the extent the item or services are covered by a majority of commercial insurers. To ensure there is adequate stakeholder engagement on the standards, CMS
committed, not later than 12 months after the effective date of this rule, it will establish the methodology by which commercial insurers policies are determined to be relevant based on the measurement of majority of covered lives.
This definition is effective 60 days after publication of this final rule in the Federal Register.
B. Application of the Reasonable and Necessary Standard to the MCIT
Pathway We proposed that, under the MCIT
pathway, an item or service that receives a breakthrough device designation from the FDA would be considered reasonable and necessary under section 1862a1A of the Act because breakthrough devices have met the FDAs unique breakthrough devices criteria, and they are innovations that serve unmet needs. While other devices are still considered new to the market, for example, PMAs and even some 510ks, the devices designated by the FDA as breakthrough are representative of true innovations in the marketplace.
This application of the reasonable and necessary standard in this way would ensure that the MCIT pathway can provide a fast-track to Medicare coverage of innovative devices that may more effectively treat or diagnose lifethreatening or irreversibly debilitating human disease or conditions.
MCIT would provide by providing national Medicare coverage for devices receiving the FDA breakthrough device designation, which are FDA marketauthorized and used consistent with the FDA approved or cleared indication for use also referred to as the FDA

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required labeling,15 so long as the breakthrough device is described in an appropriate Medicare benefit category under Part A or Part B and is not specifically excluded by statute. We believe the criteria for qualification as a breakthrough device, as defined in section 515Bb of the Food, Drug and Cosmetic Act 21 U.S.C. 360e3b is sufficient to satisfy the elements of the reasonable and necessary standard.
The first breakthrough device designation criterion is that a device must provide for more effective treatment or diagnosis of lifethreatening or irreversibly debilitating human disease or conditions 21 U.S.C.
360e3b1. The second criterion is that the device must satisfy one of the following elements: It represents a breakthrough technology; there are no approved or cleared alternatives; it offers significant advantages over existing approved or cleared alternatives, including additional considerations outlined in the statute; or availability of the device is in the best interest of patients 21 U.S.C. 360e 3b2. Thus, breakthrough devices are those that HHS has determined may provide better health outcomes for patients facing life-threatening or irreversibly debilitating human disease or conditions. We believe that a device meeting these criteria, once also FDA
market authorized, is reasonable and necessary for purposes of Medicare coverage.
We recognize that the FDA market authorization of breakthrough devices warrants immediate coverage under the reasonable and necessary clause in section 1862a1A of the Act. We previously stated that FDA
determinations were not controlling determinations for Medicare coverage purposes under section 1862a1A of the Act. For more information see the January 30, 1989 Federal Register 54
FR 4307 FDA approval for the marketing of a medical device will not necessarily lead to a favorable coverage recommendation . . . and the August 7, 2013 Federal Register 78 FR 48165
However, FDA approval or clearance alone does not entitle that technology to Medicare coverage.. Under the Secretarys authority to interpret section 1862a1A of the Act supra section I.A., we are revising our interpretation of the statute because of the practical concerns that our current standards have delayed access to a unique set of 15 FDA Guidance for Industry, Medical Product Communications That Are Consistent with the FDARequired LabelingQuestions and Answers, available at https www.fda.gov/media/
133619/download.

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